What are the different company formation types?
The most common company business structures that can be registered in Trinidad and Tobago are:
- Sole Proprietorships (sole trader)
- Limited Liability Companies and unlimited companies
Registration takes place at the Companies Registry.
What is the Companies Registry?
The Companies Registry is a sub-division of the Ministry of Legal Affairs. The Companies Registry administers and enforces most parts of the Companies Act. The Registry registers local and non-local companies and annual returns. It also de-registers defunct solvent companies and provides the public with services and facilities for inspecting and obtaining company information kept by the Registry.
What is the Companies Act?
Companies Act Chapter 81:01 of the Laws of the Republic of Trinidad and Tobago is the principal legislation that applies to all companies incorporated in Trinidad and Tobago. Some of the provisions are equally applicable to non-Trinidad and Tobago incorporated companies that establish a place of business locally.
What is a Limited Liability Company?
Limited Liability Companies (LLC) are the most popular form of corporate entities in Trinidad and Tobago. A limited liability company is identified by (Ltd) at the end of the name of the company. It is a separate legal entity in law from its owners and therefore it can enter into contracts in its own name and sue in its own name. It also offers limited liability to its owners. This means that the shareholders are not personally liable for the company’s debts and in the event of it becoming bankrupt a shareholder’s loss would only be limited to the amount they paid for the shares in the company.
Can I conduct business without my company being incorporated?
You can conduct business without being an incorporated company through a sole trader or partnership (business arrangement where two or more parties share the management and profits). However these businesses must be registered. The first step involves registering the business name at the Company Registry. Following this the prescribed forms and fees including all individual Board of Inland Revenue (BIR) file numbers must be sent to the Companies Registry. Once approved by the Registry, the business is deemed duly registered.
What is the difference between a sole trader registration and a Ltd company formation registration?
Registering as a sole trader informs the BIR that you are going to be self employed and will be earning money through your own business. As a sole trader you are trading as an individual and taking on all financial and legal liability yourself. Incorporating a company establishes a company which is a separate legal entity from yourself. By trading through the company you can benefit from ‘limited liability’ from financial and legal issues. It also means that multiple people can formally take joint ownership of the business by allocating shares in the company.
Why should I incorporate my company?
The most common motivations for incurring the cost of setting up a Ltd are:
- You can benefit from ‘limited liability’ from financial and legal issues.
- Multiple people can formally take joint ownership of the business by allocating shares in the company.
- In some businesses and industries, having a limited company can provide a more professional image.
- More access to funding; as a limited company is a distinct entity from its owners, it may be easier for a company to secure business finance than it is for the sole trader counterparts.
- On some occasions there can be tax benefits.
What do I need to register a company?
To register a limited liability company in Trinidad and Tobago you need the following:
- A suitable company name.
- A minimum of two (2) directors.
- One (1) company secretary.
- A registered address for the company.
- Two forms of ID for each director.
How do I choose a company name?
There are a number of rules governing what can be chosen as a company name when you register a new company, the most important being that it’s different from any company that already exists. A new limited company’s name must be approved by the Companies Registry.
What is a company name search?
The Registration of Business Names Act, prohibits the registration of identical names, so you can’t register a business name that another company is already using. You can search the business names public record at the Companies Registry. This will tell you if someone is already using the name you have selected and where the business is located.
Why do I need more than one company name when applying for a Name Search?
You are required to submit three (3) names: the primary name and two alternatives. In the event the primary name you have chosen is taken by another incorporated company, then one of the alternate names can be approved. This also safeguards you from having to pay to conduct a name search each time your submitted name may be rejected.
Can I use my home address as my company’s registered address?
Yes, your home address can be used as a company’s registered office address provided you have proof of the residence. All company related documents that you receive from the Companies Registry, or any other documents for taxes etc. will be delivered to that address.
Who can be appointed as a director?
- A limited company must appoint a minimum of two directors.
- The Companies Act requires that a director must have the appropriate competence and skill set to direct the management of the company.
- A director can not be less than eighteen years of age, mentally ill or been declared bankrupt.
- There is no legislative restriction regarding the nationality of directors to serve on a board in T&T.
- Directors as shareholders; local legislation is silent regarding any restrictions of the owning of shares by directors of the organization.
Can one of the directors be a company secretary?
- One of the directors can be a secretary.
- To be the company secretary you must ensure that the organisation complies with relevant legislation and regulation, and keeps board members informed of their legal responsibilities. Company secretaries are the company’s named representative on legal documents, and it is their responsibility to ensure that the company and its directors operate within the law. It is also their responsibility to register and communicate with shareholders, to ensure that dividends are paid and to maintain company records, such as lists of directors and shareholders, and annual accounts.
What are shares and shareholders?
The capital of a company is divided into shares. Each share forms a unit of ownership of a company. A shareholder is any person, company or other institution that owns at least one share of a company’s share stock. All the company’s profits belong to the shareholders. This profit is paid to shareholders through dividends.
How should I allocate shares in my company?
By law there must be at least one shareholder who subscribes to take at least one share. If you wish to take an equal amount of shares with another member of the company then it is usual to take one share each. See the examples below:
- Mr Johnson wants to own 100% of the issued shares in Company X Limited. Mr Johnson would take 1 share or whatever the total number is issued (if 100 were issued, he will take 100).
- Mr Johnson and Miss Crichlow want to own 50% each of the issued shares of Company X Limited. Mr Johnson will take 1 share and Miss Crichlow will take 1 share or if 100 shares were issued, they would have 50 each.
- Mr Johnson wants to own 80% and Miss Crichlow 20% of the issued shares of Company X Limited. Mr Johnson will take 8 shares, Miss Crichlow will take 2 shares or if 100 shares were issued it would be 80 and 20 respectively.
Bye-laws vs. Articles of Incorporation
The Articles of Incorporation is a form required to register the company which generally seeks information such as the name of the person organizing the Ltd; the number of shares the Ltd can issue, if applicable; the names of the Directors; and the location of the company. They do not go into detail about the company’s operations or structure, which is covered by the Company’s Bye-laws. The basic components of Company Bye-laws are as follows:
- An Organization’s Name, Registered Office
- Directors Duties, Remuneration
- Shareholder meetings and voting
- Execution of Contracts
Note: Bye-laws can be tailored to the unique needs of your company. Emma J Charles Ltd provides you with a standard downloadable word document containing Company’s Bye-laws in accordance with provisions of the Companies Act 1995 when purchasing any Company Registration package.
What documents do I get once I have incorporated a company with Emma J Charles Limited?
Once your company is officially incorporated you will receive the following documents for your records:
- Certificate of Incorporation
- Filed Notice of Directors
- Filed Notice of Secretary
- Filed Notice of Address
- A downloadable word document of your Company Bye-laws.
- A downloadable tax summary guidance specific to Trinidad and Tobago.
What is a company stamp/seal, why do I need one?
A corporate stamp/seal is the official mark or signature of a company, and signifies that the document on which it is affixed is a formal, legally binding document.Company seals are stamps that emboss or imprint company information such as the company name, address and contact information. Most formal banking activities such as opening a company bank account requires a company stamp.
Why choose us to incorporate your company?
- Hassle free, easy online service
- Never leave the comfort of your home or office
- We provide you with must have customised legal contracts to protect your company
- Easy to follow Tax Guidance to ensure your company is compliant
- Affordable package options to suit your pocket and needs
How do I place an order to incorporate my company on your site?
Step 1: Go to www.emmajcharles.com
Step 2: Select the Our Packages option at the top of the page
Step 3: Select the package that suits your needs
Step 4: Complete the questionnaire
Step 5: Complete the payment options
How long does it take to incorporate my company?
This is based on your chosen package, the duration of process is between 10 and 30 days. We aim to deliver final incorporated documents to you no later than 30 days from your order.
How will I sign the documents?
All documents requiring your signature will be delivered to your mailing address via our Courier service. When you have completed the signing of the documents, you will be required to contact our Courier service to collect the documents. The cost of the Courier is included in the package price.
What form of payments do you accept?
- Bank deposit/transfer
- Credit/debit card payments (via Paypal)
Are my online transactions secure?
See our Privacy Statement for more information.
Is my personal information secure and kept confidential?
See our Privacy Statement for more information.
What are some things I need to do after my company is incorporated?
- Apply for Company Board of Inland Revenue (BIR) Number
- Apply for VAT Clearance or VAT Number (if the company has the potential to earn more than TTD $500,000 per annum)
- Attain Company Stamp/Seal
- Apply for Company Bank Account
What are some on-going reporting requirements I have to do?
- File Annual Returns thirty (30) days after each anniversary date of incorporation.
- File to Company Registry Notice of Change of Directors if applicable
- File to Company Registry Notice of Secretary and Change of Secretary (or Assistant Secretaries).
- File to Company Registry Notice of Change of Address, if applicable
- Pay Company Taxes and complete Tax Returns
What are the duties of the directors?
All directors, have three (3) principal legal duties:-
- to direct the management of the business and affairs of the company
- to act honestly and in good faith with a view to the best interests of the company and
- to exercise the care, diligence and skill of a reasonably prudent person
What are the responsibilities of the company secretary?
- The Secretary sees to it that the Directors follows correct procedures and that they comply with the legal and statutory obligations.
- The Secretary assists in organizing the Director’s activities i.e arranging and reporting of meetings.
- The Secretary is the custodian of the records of the Company including (but not limited to) legal and statutory documents, the minutes of the board of directors’ and board committee meetings as well as securing the company’s seal.
Do I need a separate bank account for my business?
Every business should have its own bank account. There are legal reasons to keep your personal and business funds separate, but also tax ramifications.
Having business bank accounts allows you to organize your business more effectively. It’s easy to track what money is coming in and what money is going out. Plus, when tax time rolls around, it’s much easier to assemble the information relating to your business.
When you have a business bank account and your personal finances are separate from your business finances, it’s much easier to determine how your business is performing from a profitability standpoint.
How can I get paid as a director of my company?
As a Director of a limited company, you can take money from the company in 3 ways:
- Salary, expenses and benefits
If you want the company to pay you a salary, expenses or benefits, you must register the company as an employer with National Insurance Board (NIS).
A dividend is a payment a company can make to shareholders if it has made enough profit.
- Directors’ Loans
If you take more money out of a company than you’ve put in – and it isn’t salary or dividend – it’s called a ‘directors’ loan.’ If your company makes directors’ loans, you must keep records of them.
Do I need to report any changes I make to my company formation to the Companies Registry?
You are required by law to report the following changes in your company:
- A change of directors, appointment of new directors, a change in the Directors’ names or addresses should also be reported by completing and filing the Notice of Directors/Notice of Change of Directors, within thirty (30) days of the change.
- A change of Address should also be reported by completing and filing the Notice of Address/Notice of Change of Address, within thirty (30) days of the change.
- A change of Secretary, appointment of a new Secretary, a change in the Secretary’s names or addresses should also be reported by completing and filing the Notice of Secretary/Notice of Change of Secretary, within thirty (30) days of the change.
What type of records does the company need to keep?
- Records about the company such as:
- Directors, shareholders and company secretaries.
- The results of any shareholder votes and resolution, promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to.
- Promises the company makes for payments if something goes wrong and it’s the company’s fault (‘indemnities’).
- Transactions when someone buys shares in the company and loans or mortgages are secured against the company’s assets.
- Financial and accounting records:
- All money received and spent by the company.
- Dividends paid out.
- Details of assets owned by the company.
- Debts the company owes or is owed.
- Stock the company owns at the end of the financial year.
- All goods bought and sold; who you bought and sold them to and from (unless you run a retail business).
What is a BIR Number?
All companies are legally obligated to register for a Board of Inland Revenue (BIR) file number to be used in payment of taxes and filing of returns. This number must be quoted on all correspondence to the Board of Inland Revenue.
How is my fiscal or financial year determined?
A company’s fiscal year is its financial year. Fiscal year is stated as of the last day of the year; December 31, for example. Most companies use either the end of the calendar year (December 31) or the end of a quarter (March 31, June 30, or September 30) as their fiscal year end date.
What type of tax is my company expected to pay?
Taxes to be paid via the Corporation Tax Act include Corporation Tax, Business Levy Tax, Green Fund Levy and Capital Gains Tax. Obtain a simple to follow Summary Tax Guidance on purchase of any incorporation package.
When should I pay my taxes?
Taxes are payables quarterly during each year on the following dates, 31 March, 30 June, 30 September and 31 December. Don’t forget to file your annual Tax Returns as well.
Why is it important for a company to file its Annual Return?
It is an annual requirement for a company to provide an accurate reflection of its state of affairs i.e. officers, shareholdings and any indebtedness. This is required to be filed with the Companies Registrar. The Annual Return should be filed whether or not a company is trading.
Note. An annual return is not a tax return.
What is VAT, why do I need a VAT number?
Value Added Tax, or VAT, is applied to both goods and services in Trinidad and Tobago and is included in the final price of the product/services. VAT is charged at a rate of 12.5%. VAT-registered businesses must collect VAT from customers, submit VAT returns and pay any VAT that they owe to the Inland Revenue Division of the Ministry of Finance. VAT registered businesses can deduct any VAT that they pay when purchasing goods and services for the business from the VAT that they collect from customers.
Businesses that sell goods or services worth TT$500,000.00 or more in a twelve-month period must register for VAT. Individuals and businesses must also register if they forecast sales of TT$500,000.00 or more in a twelve-month period.
Registered businesses that cease trading, dispose of or transfer their business must apply for Cancellation of VAT Registration. This also applies to individuals or businesses that no longer generate revenues above the threshold amount of TT$500,000.00.
What is a Founder’s Agreement?
A Founder’s Agreement provides a general guide to pre-incorporation business associations. It provides a clear agreement amongst the founders around a handful of key issues that are critical to safeguard the future viability of a new enterprise and to raise venture money. For example: the roles and responsibilities of the founding team, equity ownership and vesting and Intellectual Property ownership.
What is an employment contract?
An employment contract is an agreement between an employer and employee that sets out terms and conditions of employment. Ideally, employment contracts should be in writing, however they can be orally. The basic terms and conditions of employment usually contains a job description with a general provision that the employee is to do such other tasks as may be required. The terms of the contract of employment is useful as it provides clarity on important matters such as the period of notice which will be required on termination, as well as the conditions which the employer considers necessary for the protection of its intellectual property rights and trade secrets. It may also include restrictive covenants prohibiting an ex-employee from setting up a business in competition.
What is a Non-Disclosure Agreement?
A Non-Disclosure Agreement or confidentiality agreement is a contract by which one or more parties agree not to disclose confidential information that they have shared with each other as a necessary part of doing business together.
Why should I have a Freelancer/Consultant Agreement?
Having a contract ensures you are not taken advantage of. One of the most important provisions is to ensure your payment! In your contract make clear your rates and when you get paid. For example, you can receive all or some of your money up front or with 3 installments of 40-40-20; 40% upfront, 40% when you send the first draft and the final 20% when you send over the finished copy. How you get paid should also be included in the contract. Do you accept payment via direct deposits, cheques or PayPal? How long a grace period do you give when receiving payment? And do you apply interest for late payments. Some other good clauses are:
- A single point of contact clause – you can limit your communication to one person to reduce multiple instructions.
- Restrict rewrite/rework clause – offer a number of free revisions/rewrites and then charge for any more the client wants done. Most freelancers offer 2 free revisions, 3 at most depending on the nature of the work they offer.
- Scope Creep – doing more work than you signed up for and you’re not getting paid for it! Reserve your right to adjust the rates of the project should the scope of the job, or amount of work you have to do is increased significantly. This way the client knows that they are liable to pay extra for any additional requirements they want to throw in.
- Copyright Protections and pass over to client – for most freelancers it boils down to owning the rights until the final payment is made.
What is a Lease Agreement?
A lease agreement is a contract between a landlord and a tenant. It records all the key things that a landlord and a tenant have agreed to regarding the tenancy.